Agenda item

6.1      Sarah Hay, the Pensions Officer People Services, introduced her report on a proposed admission into the Fund. The Pensions Officer People Services said it was her recommendation to the Pension Committee to not accept a new employer unless they fulfilled specific criteria, such as TUPE transferring of staff or being a scheduled body with entitlements to access the Fund. Despite not meeting these requirements, the London Diocesan Board of Schools (LDBS), operating in Westminster and supporting local schools, is regarded as a special case. The Committee were informed that the Executive Director of Bi-Borough Children's Services at Westminster City Council, Sarah Newman, supported the application into the Fund, acknowledging their contributions to educational needs in the Borough.

6.2      The Committee were informed that the LDBS provided membership data for 11 staff, which was reviewed by the Fund's actuary. The Pensions Officer People Services informed Members that initially, they had proposed an open admission agreement, allowing them to add new members continuously. However, due to the risks involved, an open admission agreement without a ceding employer to guarantee their liabilities was deemed unfavourable for the Fund. The Pensions Officer People Services informed the Committee that the actuary calculated an appropriate rate for LDBS' potential admission based on a closed admission agreement and a cautious funding outcome strategy. LDBS would transfer staff from the Church of England defined benefit scheme by a specific date, with subsequent, new staff joining a different scheme. The actuary's assessment suggested an employer rate of 42.5%, significantly higher than the current contribution in the Church of England Pension scheme, assuming a 90% likelihood of their future funding success.

6.3      The Pensions Officer People Services said that, when considering the possibility of future financial issues, various measures were explored, including the potential requirement of a bond to cover insolvency risk. A credit report on LDBS was requested, and legal consultation was pending, awaiting the Pension Fund Committee's direction. The recent financial accounts shared by LDBS reflected a healthy balance sheet. The Pensions Officer People Services proposed that the Pension Committee should decide on allowing LDBS to join the Westminster City Council Pension Fund on a closed admission basis from 1 April 2024.

6.4      The Committee asked how many schools the LDBS dealt with and were informed by the Pensions People Officer that there was not a definitive figure, and some of their schools were located in the neighbouring borough of Kensington and Chelsea. The Pensions People Officer informed Members that the LDBS itself was located within Westminster, which is why the request was coming to this Pension Fund Committee for admittance.

6.5      The Committee asked if it would be possible for a bond to be put in place and then reviewed at five-year intervals. In reply, the Pensions People Officer informed Members that this had not been done before but was technically possible.

6.6      The Tri-Borough Director of Treasury and Pensions informed Members present that the standard approach when evaluating an admission body into the Fund would be a 66.6% (2/3) chance of probability of success. Members were informed that this admission had been estimated at a 90% probability, a very prudent approach.

6.7      The Committee asked what other options would be open to the LDBS if they were not admitted, and if they could not afford the admission rate if they were to be admitted. The Pensions People Officer replied that she was unsure what other options would be available, or if there would be any at all. With regards to their contribution rate, Members were informed that if they could not meet this obligation, they could be denied entry to the Fund.

6.8      The Committee were postponed making a decision and asked for the Pensions People Officer to re-enter discussions with the London Diocesan Board of Schools, and to include the possibility of a bond with them.